The Hipgnosis saga shines a spotlight on critical London failings
Amongst the stash of pop culture offerings in Hipgnosis’ rights catalogue are those of the legendary music producer Jimmy Iovine.
The impresario sold his future royalties to the investment vehicle, including the production rights to the Eminem vehicle movie 8 Mile. That surprisingly watchable film culminates in a rap battle: for those unfamiliar, that’s when two artists go toe to toe (or mic to mic) until the final put-down renders the other speechless.
It’s all good knockabout fun and it’s also a very helpful metaphor for the takeover battle for Hipgnosis, seemingly won yesterday by Blackstone.
That there was such a ruckus for Hipgnosis despite a raft of negative press over the past couple of years shows two things; one, the management team were onto something and two, London really cannot place a value on anything remotely commensurate with what companies, or indeed trusts, are worth.
The endless trail of take-privates over recent years has redefined the takeover premium – a board can now expect, and shareholders would demand, a good 30 per cent as a starting bid, let alone anything else.
The hope, as expressed by Nick Train and others, is that all of these takeover attempts finally persuade London investors they’re sitting on a gold mine, and start to price up UK-listed companies.
Unfortunately, it’s just as likely that those with more short- and medium-term horizons will go the other way, and sit on assets hoping that they’ll be next through the lucrative exit door.
Either way, the case for reform is clear. Ambition is the only way out, or it’s managed decline across the piece. That’s no good for anybody.